NeoStem (AMEX:NBS) said Tuesday revenue from continuing operations rose nearly 55 per cent in the second quarter as the cell therapy company continues to complete the divestiture of its Chinese generic pharmaceutical business.
the three months that ended June 30, revenues from continuing
operations, which consist of the company's cellular therapy business in
the United States, were $3.4 million, versus $2.2 million a year
The growth was driven mainly by clinical service
revenues in the company's Progenitor Cell Therapy (PCT) manufacturing
subsidiary, reflecting increased penetration into the cell therapy
The company also said it saw a general increase in
the development of autologous cell therapies in the United States due to
enhanced investment and expanded marketing programs both this year and
business combines a contract development and manufacturing organization
(CDMO) with a cell therapy product development program. The results
from Erye, a China based generic pharma company NeoStem is divesting, were included only in discontinued operations.
Since the announcement on June 18 of NeoStem's
agreement to divest its majority stake in Erye and to focus on its cell
therapy business, its stock price has risen over 50 per cent.
has now received directly or into escrow $6.2 million from the deal,
representing 50 per cent of the total $12.3 million cash purchase price.
The divestiture will also return around 1.0 million shares of its stock
and cancel 1.2 million stock options and 640,000 warrants.
cash will be used toward its US operations, and will bolstern its
balance sheet by eliminating more than $35 million in short and
long-term debt obligations. The deal is expected to close in the next 6
to 10 weeks, subject to China regulatory approvals.
company's PCT subsidiary in the US acts as a consultant, and cGMP
(current good manufacturing practice) service provider from product
discovery to commercialization for product developers.
In its thirteen year history, the unit has supported over 100 regenerative medicine companies and NeoStem anticipates growth in the United States and abroad by expansion into Europe, it said.
In addition to PCT, NeoStem
also owns an autologous adult stem cell therapy, known as AMR-001,
which is designed to prevent adverse cardiac events following acute
myocardial infarction (AMI), or what is commonly referred to as a heart
The company is currently conducting its PreSERVE phase 2
clinical trial in the U.S. for the treatment, and anticipates completing
enrolment in 2013, with six months initial data readout near the end of
Peak annual worldwide sales of AMR-001 for this indication could exceed $1 billion, NeoStem
said Tuesday. The therapy is protected by two issued and multiple
pending U.S. patents with corresponding patent coverage in selected
The Amorcyte AMR-001 product development
program also extends to congestive heart failure, with the company
preparing to launch a phase 1 clinical trial in early 2013. The
worldwide congestive heart failure patient population is estimated to be
four times larger than that of AMI.
Net loss from continuing operations attributable to NeoStem
common shareholders in the latest quarter was $7.2 million, or $0.05
per share, compared to $10.1 million, or $0.13 per share, a year
Loss from discontinued operations, including the
company's 51 per cent share of a total $28.0 million asset impairment
charge from Erye, amounted to $13.4 million, or 10 cents per share.
Through warrant exercises and equity sales, NeoStem
has raised $17.6 million year to date. The company closed its Boston
facility and has consolidated these operations into its cellular therapy
operations in Allendale, New Jersey and Mountain View, California in an
effort to save costs
At quarter end, the company had cash and equivalents of $2.1 million and another $2.5 million held in escrow.